AINS 103 Questions with CORRECT Answers

AINS 103 Questions with CORRECT Answers

Question:
What format do most insurers use for commercial auto coverage?
Answer:
Due to auto insurance needs and legal requirements, coverage needs can vary, which is
why most insurers use a flexible, modular format.


Question:
Business Auto Coverage Form (BACF):
Answer:
Provides auto liability insurance and includes optional coverage for physical damage to
autos.


Question:
BACF Liability Coverage:
Answer:
The insurer agrees to pay damages for bodily injury or property damage the insured is
liable for that is caused by an accident involving a covered auto. Exclusions, policy limits
and other conditions may apply.


Question:
BACF Physical Damage Coverage:
Answer:
Coverage is optional, but is often required if a business is financing or leasing its autos.


Question:
The BACF allows a business to select from three basic physical damage coverages:
Answer:
Collision


Question:
-Comprehensive -Specified Causes of Loss Collision Coverage:
Answer:
Insures direct and accidental loss of or damage to a covered auto caused by its collision
with another object or is overturned.

,Question:
Comprehensive Coverage:
Answer:
Open perils coverage, which insures direct and accidental loss of or damage to a
covered auto by any peril EXCEPT collision, overturn, or one specifically excluded.
Overlaps with Specified Causes of Loss Coverage.


Question:
Specified Causes of Loss Coverage:
Answer:
Covers direct and accidental loss caused by fire, lightning, explosion, theft, windstorm,
hail, earthquake, flood, mischief, vandalism, or loss resulting from the sinking, burning,
collision, or derailment of a conveyance transporting the covered auto. Overlaps with
Comprehensive Coverage.


Question:
Important Endorsements:
Answer:
Coverages for medical payments, personal injury protection (PIP), uninsured motorists
(UM), and underinsured motorists (UIM) are commonly added by endorsements to
commercial auto coverage forms.


Question:
Auto Medical Payments Coverage:
Answer:
Pays small bodily injury claims resulting from an auto accident, regardless of fault.


Question:
(Personal Injury Protection (PIP) Coverage:
Answer:
May be legally required by state law. It pays benefits, regardless of fault, for medical
expense, income loss, and other expenses resulting from an accident.

, Question:
Uninsured/Underinsured Motorist (UM/UIM) Coverage:
Answer:
Pays for injuries caused by another motorist who is uninsured/underinsured and unable
to pay as a result.


Question:
Jane is an Electrician who drives her employer covered auto, a van, to a customer's
house. While parked, the van leaked coolant on the customers driveway. Does the BACF
provide coverage for the pollution cleanup?
Answer:
Yes.


Question:
What three basic physical damage coverages does the BACF offer to businesses?
Answer:
Collision


Question:
-Comprehensive -Specified Causes of Loss Which example would qualify as an uninsured
motorist pursuant to an uninsured motorist UM endorsement on a business auto policy?
Answer:
A hit-and-run driver.


Question:
The Morlyn Corporation has a Business Auto Coverage Form (BACF) that provides
liability coverage for any auto. In addition to the named insured, who/what would also
be an insured under Morlyn's BACF when driving a covered auto?
Answer:
An employee driving a vehicle leased by Morlyn for business purposes.


Question:
Coverage will apply under the liability insuring agreement of the Business Auto
Coverage Form (BACF) for bodily injury or property damage due to:
Answer:
Caused by an accident.